1997 Tax Help Archives  

What To Do If You Can't Pay Your Tax

This is archived information that pertains only to the 1997 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

For various reasons, you may not be able to pay your federal individual income tax in full. You should not delay filing your tax return if you are unable to pay the tax due. When your tax return is not filed on time, you may have to pay a failure-to-file penalty, in addition to a failure-to-pay penalty, and interest.

If you can't pay the amount you owe in full, file your tax return on time and attach to the front either a completed Form 9465, Installment Agreement Request, or your own written request for a payment plan, specifying the amount and the date you can pay each month. You should pay as much as you can with the return, to lower the interest and penalty charges. If you have already mailed your tax return and have received a notice or bill requesting payment, contact the IRS immediately by calling the telephone number shown on the notice. You may be eligible to establish an installment agreement by telephone. If you prefer you may attach a completed Form 9465 or your own request to the notice and mail it to the appropriate office. The IRS will let you know usually within 30 days, whether your request is approved or denied, or if additional information is needed. If approved, a user fee will be charged.

Before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan. The interest rate your bank charges may be lower than the combination of interest and penalties charged by the IRS. Remember, penalties and interest will be charged on the balance due even if you have an approved installment agreement.

It is important that you contact IRS as soon as you become aware of a tax liability. IRS makes a distinction between taxpayers making a sincere effort to pay their debt and taxpayers who show little or no evidence of cooperation. If you neglect or refuse to make payment or other arrangements to satisfy your bill in full, we may take enforced collection action. Refer to Topic 201 for information about the collection process. For additional information concerning tax questions, alternative methods of payment, or the nearest location to receive assistance, please call 1-800-829-1040.

If you would like some printed information on your rights as a taxpayer, making arrangements to pay your bill, installment agreements, and what happens when you take no action to pay, order Publication 594, Understanding the Collection Process; and Publication 1, Your Rights As a Taxpayer, by calling 1-800-829-3676.

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